"Capitalist" has become an accusation. The creative destruction that is at the heart of a growing economy is now seen as evil. Americans increasingly appear to accept the mind-set that kept the world in poverty for millennia: If you've gotten rich, it is because you made someone else poorer.

What happened to turn the mood of the country so far from our historic celebration of economic success?

Two important changes in objective conditions have contributed to this change in mood. One is the rise of collusive capitalism. ... Another change in objective conditions has been the emergence of great fortunes made quickly in the financial markets.

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If it is necessary to remind the middle class and working class that the rich are not their enemies, it is equally necessary to remind the most successful among us that their obligations are not to be measured in terms of their tax bills. Their principled stewardship can nurture and restore our heritage of liberty. Their indifference to that heritage can destroy it.

lunes, 30 de julio de 2012

The China Deal: Why China's economic success is fragile

The explanation that is most widely shared is that the Chinese rulers kept political control and used it to reform the economy gradually. They pursued Deng Xiaoping's "four modernizations" (of agriculture, industry, defence, and science and technology) but rejected calls for the so-called "fifth modernization" (democracy).

In the Soviet Union at the same time, in contrast, Mikhail Gorbachev abandoned the levers of totalitarian control. He allowed the Berlin Wall to be pushed over. The Soviet communist party imploded; insiders "stole the state." The Soviet Union collapsed and Russia entered a decade of near anarchy.

This explanation has obvious appeal but is incomplete on closer inspection. It is widely believed that the Soviet leaders did not try the China solution of gradual economic reform without political reform. The historical record shows, however, that this is untrue.

Introduction to Economic Sophisms

My design in this little volume is to refute some of the arguments that are urged against the freedom of trade.I do not propose to engage in a contest with the protectionists; but rather to instill a principle into the minds of those who hesitate because they sincerely doubt. I am not one of those who say that protection is founded on men's interests. I am of the opinion rather that it is founded on errors, or, if you will, upon incomplete truths. Too many people fear liberty to permit us to conclude that their apprehensions are not sincerely felt.

It is perhaps aiming too high, but my wish is, I confess, that this little work should become, as it were, the manual of those whose business it is to pronounce between the two principles. Where men have not been long accustomed and familiarized to the doctrine of liberty, the fallacies of protection, in one shape or another, are constantly coming back upon them. In order to disabuse them of such errors when they recur, a long process of analysis becomes necessary; and everyone has not the time required for such a process — legislators less than others.

This is my reason for endeavoring to present the analysis and its results cut and dried.

THE ISLAMIST IN THE WHITE HOUSE

by: Jeffrey T. Kuhner

The Muslim Brotherhood is on the rise. The Islamist group is spreading across the Middle East. The question is whether it has infiltrated the Obama administration, especially the State Department. Led by Rep. Michele Bachmann of Minnesota, a band of House Republican conservatives is investigating the reach of the Muslim Brotherhood. For this, they are being vilified not just by the liberal media, but by the GOP establishment. Our ruling class refuses to confront the reality of radical Islam.

jueves, 26 de julio de 2012

The Fed, The Financial Crisis And Monetary History

HOFFMEISTER: Dr. Meltzer, you are of course one of the leading economists of the world and the expert on the history of the Federal Reserve. When did you first become interested in monetary policy?

DR. MELTZER: I wrote my thesis on French inflation so that was the beginning, but I didn’t have any career plan to pursue either that or financial inflation. One day, I was at work, and then I got a call. There had been a study of something called Employment, Growth and Price Levels in 1959. Professor Otto Eckstein from Harvard was the head of that study and they did…put out a lot of pamphlets. Among the things that they collected was a bunch of balance sheets, income statements, transactions from the dealer market for government securities. The caller asked me whether I’d like to work on a study of marketing government securities and write a report for Congress. I didn’t have the slightest idea what the dealer market in government securities was. The next man that came into my office is one of my colleagues a guy named, Gert Von Der Linde. And I said to him, “Do you know what the dealer market in government securities is?” He said, “Yes. That’s where they do all the market operations.” “Oh,” I said, “that’s interesting. Do you want to do this thing?” So we wrote a report for I believe the Joint Economic Committee for Congressman Patman, who was at that time the vice chairman or the chairman of the Joint Economic Committee and that was my beginning, but that was only a small beginning.

A couple of years later, I got a call from Congressman Patman’s office and he said he’d like me to do a followup study on the dealer market for government securities. I told the guy, “I’ll be glad to come and talk to him, but I don’t think that’s the problem.” So he said, “Fine.” So when I talked to Congressman Patman, he said, “Well,” you know when I told him what I did, what I believe, he said, “What do you think the problem is?” And I said the problem is at the Fed. By that time, I knew a good deal more about it. So he said, “Why don’t you look into them?” That’s how I got started.

HOFFMEISTER: And what year was that sir?

DR. MELTZER: That was 1963. Our report came out in 1964.

So that’s how I got started on the Fed and I interviewed Chairman Martin, Vice Chairman Balderston, the head of the New York Fed at that time because I was a congressional staffer, so we had access to them. They wouldn’t say no to Congress. And we wrote three reports on what was wrong with the Fed and what would be better, and they held hearings on that. The result was, it actually made some difference. A whole bunch of economist testified at those hearings and they agreed that there were a lot of things going on with the Fed, but they all didn’t agree with each other about what should be changed. The Fed then became much more concerned about its relations with the academic community. Therefore it started something called the Federal Reserve consulting operation. They hired my old dean to organize those meetings, and I went to many of them. Milton Friedman went to some of them. Only once did they have us both at the same time. That was as much as they could take. But they also had a lot of people who were much more activist than we were like Paul Samuelson, Jim Tobin, so on. And they would discuss various issues. I mean they opened up to a broader audience.

The second thing they did was they greatly increased the research staff because one of the things we criticized was the fact that they didn’t have any clear idea about what they were doing. I mean they had been on the gold standard when they started and that was a guideline for them, and when they were off the gold standard, they really had not adjusted. When interviewing Chairman Martin, I asked him, “How do you run the monetary policy?” And he told me, “Well monetary policy is like a river. And you have to keep the river within the banks. You don’t want to get over the banks, but you don’t want to get too low either because…” And that was all pictorial. There was nothing analytic about that and I was really, I must say, surprised at how little they had thought about what do we do and how do we do it. Then we went to the vice chairman, a man named Canby Balderston, who had been dean at Wharton School, and I asked him, “Well, how do you think about monetary policies?” He says, “Well, monetary policy is like a river, but you got to keep it out of the banks just so it irrigates the fields on the sides and so on. Again, pictorial. I went to New York and talked to the vice chairman of the open market committee, the head of New York Fed, and he had the head of the open market trading desk, a guy named Bob Rouse with him. We asked him the same question, and he told us, “Well, we try to control credit.” So I said, well is credit a stock or a flow, and there was, well, puzzlement. I said if I lend money to the man who was with me, I said is that probably what you want to do? He said, we’d better get an economist here. It was clear they had never thought through the most basic issues.

While media portrayals of women and girls as sexual objects are omnipresent and intrusive, we can blame too much on these public influences and forget the importance of what parents do. That seems to be the main message of a US study of girls aged 6 to 9 years.

Psychologists at Knox College in Galesburg, Illinois (its Calvinist namesake would have been pleased) showed 60 girls a series of paper doll pairs, one dressed in tight and revealing “sexy” clothes and the other wearing a trendy but covered-up, loose outfit, Jennifer Abassi reports on Live Science.}

Presenting each pair, the researchers asked each girl to choose the doll that (a) looked like her, (b) looked how she wanted to look, (c) was the popular girl in school, and (d) she wanted to play with.

Across-the-board, girls chose the "sexy" doll most often. The results were significant in two categories: 68 percent of the girls said the doll looked how she wanted to look, and 72 percent said she was more popular than the non-sexy doll.

Popularity is clearly a key to this trend, with many 6- to 7-year-old girls, even, choosing the sexualized doll as their ideal self.

miércoles, 25 de julio de 2012

What exactly is the United Nations and, for that matter, why is there still a United Nations at all? How has it managed to survive over time, from 1945 down to the present—given its long record of underperformance, frequent outright failure, and even more frequent irrelevance?

On the United Nations’ core issues—collective peace and security, development, and universal human values and rights—its record is mediocre, unless one counts sheer institutional persistence as enough. And that record is particularly poor concerning the issue from which the collective sprang in 1945: international peace and security through the collective itself.

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The United Nations is an institution based around the sovereign equality of states participating in a universal institution; the United Nations is committed to certain values and yet, at least in principle, there are standards to be met by states as a condition of joining and participating.

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The distinctive salience of the United Nations is that it is a failure today—and a hope for tomorrow.